Talking about finances as a family

America Saves Week 2024, April 8-12, is an annual call to action for everyday Americans to commit to saving successfully.

LSS Financial Counseling is among the participating organizations that are encouraging everyone nationwide to set a goal for savings and make a plan to maintain or improve financial wellness.

This blog was written by America Saves for the America Saves Week initiative coordinated by the Consumer Federation of America (CFA).

Money is a sensitive subject, and talking about it, even with those closest to you, can almost seem taboo at times. However, it’s important to discuss money management and financial goals as a family. And these conversations about money aren’t just limited to your spouse and children. It’s important to also discuss finances with your parents and other important loved ones as well.

When did you first start learning about money and how to manage it? How did you learn about it?

The truth is…most of us learned through watching our parents, family members and friends handle it, along with some of our own trial and error mixed in. How we grew up and saw money being managed shapes our outlook and beliefs about it.

Talking to your children

Kids pay attention to what parents say and do, even when you don’t think so, including how you talk about and manage money - making it even more important to have conversations with them. Discussing finances with your children is a must if you want to instill good money management skills and a strong financial foundation.

Here are some tips that can help you get the conversation started:

1. Start early! Research shows that habits around money, like budgeting, borrowing and saving, start as early as 7 years old. So, the sooner you start talking, the better. No worries if your kids might already be older — it’s never too late to start. It doesn’t have to be a planned-out speech or formal discussion; you can start with a simple, age-appropriate chat. You may be surprised at what they already know and what questions they might have.
2. Fill them in on the family’s budget, debt and savings. Including your children in your money decisions will help them understand how it works and set them up for better money management skills in adulthood. Being open and honest will also encourage them to come to you with their thoughts and questions.
3. Set goals and make a plan to achieve them together. Family financial goals are super important and much easier to accomplish when everyone is on board and working together. It helps children learn how to prioritize their wants and needs as well as work towards achieving things that matter to them. These are skills that will follow them into adulthood and set them up for success.
4. Set a family money date. Talking about money is not a one-and-done conversation — you must work to keep them involved and learning. In-depth topics like money take time to master, and it’s truly up to parents to ensure their children have a good understanding. Review and update your plans with them regularly to continuously improve their (and maybe your own) knowledge and skills.

Talking to your parents

Now, on to another tough audience — your parents. Talking to them can sometimes be more daunting than talking to your kids because these conversations aren’t always just about money. It’s important to know where your parents stand financially right now as well as their plans and wishes for the future should you need to take over for them one day (and there’s a good chance you will).

Here are some tips that will help you get through it a little more easily:

1. In most cases, it’s best to start by involving your siblings if you have any. Decide who should initiate the conversation and the role each of you will take in assisting with their money management when the time comes.
2. Choose your timing and wording carefully. This can be an uncomfortable conversation, so it’s a good idea to make a plan and for everyone involved to process any feelings about your parent’s needs as they age beforehand so emotions are under control, which will allow for a more proactive and productive talk.
3. Get a clear view. You’ll want the full picture of their current financial situation. Talk about any debt they might have, where their accounts are housed, property ownership, and long-term care insurance. You’ll also want to cover important documents that need to be in place like wills, estate plans, power of attorneys as well as health care directives and where they are kept.
4. Find out what’s important to them in their future. Aging parents face unique challenges when it comes to their finances, which can make everyone feel less confident in their future ability to make sound financial decisions. Make a plan together to ensure everyone is working toward what matters most to them in their golden years.

LSS Financial Counseling is an NFCC-accredited organization. Our certified financial counselors provide nonjudgmental support to assist people in achieving or improving their financial wellness. Schedule a free financial counseling appointment by calling 888.577.2227 or emailing us. You can also start an online appointment by creating a financial profile.